France caves in to Brittany 'ecotax' protesters

The French government has decided to suspend an unpopular environmental tax on heavy goods vehicles following a weekend of protests in Brittany. The move is expected to cost France hundreds of millions of euros in lost revenue.

In a humiliating climb-down Tuesday, the French government “suspended indefinitely” a green tax on heavy goods vehicles that was due to go into force in January 2014, following a weekend of violent protests in Brittany.

The unpopular “ecotax”, aimed at encouraging environmentally-friendly commercial transport, was designed to impose new levies on French and foreign vehicles transporting commercial goods weighing over 3.5 tonnes.

Critics in Brittany said the tax would seriously damage the region’s precarious farming and food sectors by increasing transportation costs, driving companies out of business and leading to major job losses.

Local businesses and farmers argued that because Brittany had less rail infrastructure than other French regions, it was being unfairly penalised because most goods there have to be transported by road.

France is under pressure from the European Union to rein in its ballooning state deficit and has announced some €3 billion ($4.1 billion) in tax increases for 2014 but is struggling against widespread opposition to the proposed hikes.

Prime Minister Jean-Marc Ayrault emphasised that the move was "a suspension, not a cancellation" of the tax.

"I have decided to suspend the implementation of this ecotax, to provide the necessary time for dialogue at the national and regional level," he said.

Weekend clashes

Over the weekend, around 1,000 protesters clashed with police as they attempted to destroy a toll gate near the town of Pont-de-Buis.

Protesters lit bales of hay and tyres and threw eggs at police, who responded with tear gas. At least three protesters were injured, one of them seriously, while six police officers reported injuries.

Following a meeting Tuesday morning with MPs from Brittany, French Prime Minister Jean-Marc Ayrault announced that the tax, which was set in motion by the previous centre-right government under former president Nicolas Sarkozy in 2009, would be suspended “in order to avert the escalation of violence”

Media reports on Tuesday morning estimated that dropping the tax would cost the government up to 800 million euros, while thousands of radar devices to track lorries have already been installed around the country.

The move is the Socialist government’s latest humiliating fiscal u-turn and comes days after it cancelled plans to impose retroactive taxes on popular savings accounts, following opposition from groups representing savers, the centre-right opposition and even some members of the ruling Socialist party.

French President François Hollande’s approval rate is down to an all-time low of 23 percent, according to a poll released Sunday.